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Tibergien: New Advisor Offerings Leverage BNY Mellon’s Heft

In a Pershing Insite 2013 general session with Pershing’s Chief Relationship Officer Jim Crowley on Wednesday, Mark Tibergien told the 1,400 attendees that “you can expect four things from us”:

1) that Pershing will provide a dependable core of services and products

2) that Pershing will make it easier to do business with us

3) that Pershing will be an extension of your offerings, and

4) that Pershing will give you access to the world.

In a follow-up interview on Thursday during the 15th annual Insite conference, Tibergien (left), CEO of Pershing Advisor Solutions (and a regular columnist for Investment Advisor) expanded on those comments in his trademark no-nonsense manner.

As for extending advisor offerings for clients, Tibergien pointed out the excellent response to two new offerings through PAS.

One is the provision of private banking services to PAS clients through an agreement with BNY Mellon Private Banking announced formally June 4, but which since its soft launch a few weeks ago has been well received by RIAs who custody with Pershing.

Designed for high-net-worth and ultra-HNW clients, the private banking services allow those clients to stay invested in the market but to use their assets as collateral for jumbo mortgages and an investment credit line (ICL) for loans of $1 million or more. More than $40 million in loan applications have been made since the soft launch, Tibergien said.

The second new offering is an integrated bank and brokerage custody arrangement that PAS has made with the Wealth Management Advisor Custody Group of BNY Mellon. Tibergien said that 20% of RIAs already use bank custody for some clients, and that 15% of the $2 trillion managed by RIAs is in bank custody arrangements.

While Tibergien said this group already had a “cross-referral arrangement” with BNY Mellon’s custody group, “they now report into us,” that there is a common service team for those bank-custodied assets, “adding a layer of efficiency” for RIAs, providing “one solution with a common service charge.”

Extending these formerly BNY Mellon-specific services to PAS advisors fits into Pershing Chairman Brian Shea’s stated goal in his welcome to attendees of Pershing Insite 2013 “to unlock the value of all of BNY Mellon to all of you in this room.”

It’s also part of PAS’ “conscious decision to work with advisory firms, not just advisors,” whose clients have “complex lives” and complex financial needs, said Tibergien in the interview. Taking this approach, “the high-net-worth market,” and by extension advisors’ clients, “start to look like an institution” that has institution-like needs. The extension of these services to PAS advisors, says Tibergien, is not part of Pershing’s “value added” offerings to its RIAs, but rather the simple “value we offer to our clientele.”

That approach is central even to PAS’ relationship management offerings. “If our clients can’t execute, then they’re not going to perceive the value” of those offerings, Tibergien argues. It is in “Pershing’s DNA not to be noticed” by end clients of advisors, which is why, for example, the mobile app Pershing is rolling out to end clients to access its NetX360 platform will be labeled with the advisor’s name, not Pershing’s.

The approach reflects the “difference between seeing the advisor as a distribution channel and the advisor as a client,” Tibergien says. "As another good sign of Pershing promoting advisors’ brands rather than its own, as PAS begins to attract more advisor clients from outside its “tri-state area” home of New York, New Jersey and Connecticut, Tibergien reports that “lots of advisors don’t even know who Pershing is.”

A third area where advisors can benefit from PAS’ parent company’s breadth is in the global arena. “We have end clients in 50 countries,” notes Tibergien, and regulatory reform and market demand are the drivers in growth of advisors in those countries. In Latin America, he says, there was a demand for Pershing to offer offshore funds; it now offers 130 of those funds. In Asia, he points out that Pershing will be launching an Asia Pacific separately managed account offering in Hong Kong that will be distributed through Chinese advisors; a similar SMA offering is in the works for Singapore. Heading that SMA operation is John Brett, formerly of Merrill Lynch and MetLife.

Any conversation with Mark Tibergien will eventually turn to the issue of the human capital challenge faced by an aging advisor force. “I’ve been talking about succession planning since the 1980s,” Tibergien said, but he’s now changing the way he talks about the issue.

It’s no longer so much about “replacing the old guy” in an advisory firm, but is more about “people development” and a growth challenge for advisory owners. “Are you building a business? Are you becoming the employer of choice” in your geographic area? The issue is now “not about people leaving” the business, but why in a time of high unemployment there are “so few people” entering the business.